What Are Credit Card Processing Fees and
Costs?
If you are new to small business then the concept of credit card processing fees
may be foreign to you. In fact, a large number of businesses today don’t even
know what the costs associated with accepting credit cards are.
What Are Credit Card Processing Fees and Costs?
When your customers swipe their debit or credit cards to pay for goods or
services, the transaction is routed through an electronic network to complete the
purchase. This is referred to as credit card processing and it typically involves a
number of different costs that are divided up between you and your customers.
Let’s take a look at some of these fees below:
● Transaction Fee: This is the fee that you are charged each time a customer
makes a purchase with their credit or debit card. This fee is generally a
percentage of the total purchase price and is paid to the credit card
processor.
● Discount Rate: The discount rate is the fee that you are charged for each
transaction that you process. This fee is generally a percentage of the total
purchase price and is paid to the credit card processor.
● Authorization Fee: This is the fee that you are charged each time a
customer’s credit or debit card is authorized for a purchase. This fee is
generally a flat fee and is paid to the credit card processor.
● Statement Fee: This is the monthly fee that you are charged by your credit
card processor for access to your account statement.
Now that you know a little bit more about credit card processing fees and costs,
you can start to look for a processor that best fits your business needs. When
searching for a processor, be sure to ask about the fees listed above so that you
can be sure you are getting the best deal possible.